In a ruling that will make it even more difficult to challenge agency rulemakings, the U.S. Supreme Court has decided that courts must defer to an agency’s interpretation of a statute it enforces, even when addressing the jurisdictional reach of the agency itself. In City of Arlington v. FCC, the Court held that courts must apply the Chevron framework to an agency’s interpretation of the scope of its regulatory authority. This decision may apply to every federal agency, including the USEPA, giving the agencies the upper hand in judicial challenges to agency rulemakings. The Chevron case, decided in 1984, requires two steps in reviewing an agency’s construction of a statute the agency administers. Pursuant to that ruling courts must:

• Applying the ordinary tools of statutory construction, determine whether Congress has directly spoken to the precise question at issue; if the intent of Congress is clear, the inquiry ends; however,

• If the statute is silent or ambiguous as to the specific issue, determine whether the agency’s answer is based on a permissible construction of the statute; if so, that construction is entitled to deference by the court.

Since Chevron was decided in 1984, there have been significant questions as to which agency decisions it applies. That has created a circuit split over whether Chevron applies in jurisdictional matters. As the Fifth Circuit noted in its underlying opinion in the city of Arlington case, the Third, Fifth and 10th Circuits generally grant deference to agencies in jurisdiction cases, while the Seventh and Federal Circuits have explicitly refused to do so. The Circuit Court for the District of Columbia – which reviews most challenges to USEPA regulations – has, at various times, both applied and refused Chevron deference in jurisdiction cases.

In City of Arlington, the city brought suit on the theory that the FCC did not have authority under the statute to set a time frame for local government decision-making because the savings clause left the decision up to the local government. It was contended that the judicial review clause put the determination of “reasonable period of time” in the hands of the judiciary. The Fifth Circuit followed circuit precedent and disagreed, holding that the FCC’s authority to make the rule was ambiguous and that the FCC’s interpretation was a permissible construction of the statute, and it was therefore entitled to Chevron deference. In a 5-3-1 decision written by Justice Antonin Scalia, the U.S. Supreme Court affirmed the Fifth Circuit, holding that if the scope of the agency’s authority is unclear, the agency’s interpretation of its authority must be deferred to by courts if it is a permissible interpretation under the statute.

While this case is generally viewed as a win for the federal agencies, the decision does not mean that all agency actions will be completely immune from court challenges. The Court itself notes that where Congress has established a clear scope of authority, that line must stand, and if an ambiguous limitation exists, the agency can go no further than the ambiguity will fairly allow. Many “experts” believe that an alternative ruling creating a separate standard of review for “jurisdictional” challenges could have added a confusing layer, which would be costly, to already complex litigation.